Your 6-point plan to navigating a choppy stock market

Yes, he’s bearish, but Nader’s recent jump into the fray is a sign the general public has become too enthralled by stocks. This isn’t surprising, given that the S&P 500 SPX, -0.09% had been hitting new highs since mid-October.

• The Investors Intelligence Bull/Bear Ratio, a weekly survey of professional financial advisers, was recently at 3.32. Anything above 3 is a yellow flag, by how I read this gauge. Moves above 4 are a red flag. • The Cboe Options Exchange put/call ratio over the past 10 days is low at 0.75. Any read below 0.85 is excessively bullish, a negative for contrarians like me. Owning puts is a negative bet since they go up in value when the market declines. Owning calls is a bullish bet. So when put buying dries up relative to call buying to this extent, it tells us investors are bullish.

Insiders overall are also cautious, too. Sell-buy ratios tracked by Vickers Insider Weekly have risen to bearish heights. “As equities continue to hit all-time highs, contrarian corporate executives, directors and beneficial owners are responding by buying fewer shares and selling more shares,” according the letter.

2. Avoid margin. Like alcohol, debt can make the good times better and the bad times worse. If we get a market drawdown, you won’t want to be in stocks you’ve purchased with a loan from your friendly brokerage. In a worst-case scenario, you’ll get a margin call that could force you to sell stocks near the bottom. Remember that brokerages dangle more margin in front of you when the market is strong, and then pull it back during drawdowns.

“Should we experience a correction, it would likely be limited in duration and not the end of the bull market,” says Bruce Bittles, the chief investment strategist at Baird.

Россия Последние новости, Россия Последние новости

Similar News:Вы также можете прочитать подобные новости, которые мы собрали из других источников новостей

5 things to know before the stock market opens TuesdayU.S. stock futures were higher Tuesday, but indicating only a partial rebound from Monday's more than 450-point drop in the Dow.
Источник: CNBC - 🏆 12. / 72 Прочитайте больше »

Services in spotlight after Apple stock market value hits $1.4 trillionServices in spotlight after Apple stock market value hits $1.4 trillion by randewich randewich Indeed randewich
Источник: Reuters - 🏆 2. / 97 Прочитайте больше »

Coronavirus Tests Market’s Faith in Global EconomyInvestors who began the year feeling largely sanguine about the stock market are struggling to make sense of whether a growing coronavirus outbreak could upend their bets on a global economic recovery. This is way more important than worrying about money........ It will - no doubt about it You better know it
Источник: WSJ - 🏆 98. / 63 Прочитайте больше »

What to watch today: Dow to rise, big Apple earnings and possible impeachment witnessesU.S. stock futures are pointing to a higher open despite ongoing coronavirus concerns, following Wall Street's strong Tuesday rebound. Oh, and Bibi indicted for corruption. So, so more US aid for them! Right? What to watch today: Dow to rise, big Apple earnings and possible impeachment these dudes I know
Источник: CNBC - 🏆 12. / 72 Прочитайте больше »